1 00:00:02,520 --> 00:00:07,040 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:07,760 --> 00:00:10,400 Speaker 2: I'm outside of Durban and South Africa for the convening 3 00:00:10,480 --> 00:00:13,080 Speaker 2: of the Finance Ministers of the G twenty and the 4 00:00:13,080 --> 00:00:15,400 Speaker 2: Central Bank Governor. Is really sort of overshadowed in large 5 00:00:15,400 --> 00:00:17,440 Speaker 2: part with a lot of the macro developments in the world, 6 00:00:17,680 --> 00:00:20,360 Speaker 2: namely Trump's trade war, but also these questions about FED 7 00:00:20,400 --> 00:00:23,439 Speaker 2: independence and the potential shockwaves that could send across the 8 00:00:23,520 --> 00:00:26,480 Speaker 2: planet in terms of global financial stability, and of course 9 00:00:26,520 --> 00:00:28,920 Speaker 2: this question of multilateralism and its future in the absence 10 00:00:28,920 --> 00:00:31,120 Speaker 2: seemingly of the United States. And we're very pleased to 11 00:00:31,160 --> 00:00:33,920 Speaker 2: be joined now by Mattias Korman, who is the Secretary 12 00:00:33,920 --> 00:00:36,560 Speaker 2: General of the OECD and who's got a pretty unique 13 00:00:36,640 --> 00:00:39,199 Speaker 2: view in terms of the picture for sort of the 14 00:00:39,240 --> 00:00:41,320 Speaker 2: global growth at the moment and all of the risks 15 00:00:41,320 --> 00:00:43,879 Speaker 2: that are sort of posing that are being posed to 16 00:00:43,880 --> 00:00:46,680 Speaker 2: it at this stage. What are the different sort of models, 17 00:00:46,680 --> 00:00:49,000 Speaker 2: the different outcomes that you're seeing for global growth, just 18 00:00:49,040 --> 00:00:51,239 Speaker 2: given the different possible outcomes we can get from this 19 00:00:51,280 --> 00:00:52,760 Speaker 2: trade war with the United States. 20 00:00:52,920 --> 00:00:57,400 Speaker 3: Well, we have recently released our economic outlook for the 21 00:00:57,400 --> 00:01:01,120 Speaker 3: global economy and compared to what we forecast back in. 22 00:01:01,240 --> 00:01:04,440 Speaker 1: December or even earlier this year, we have further. 23 00:01:04,240 --> 00:01:09,280 Speaker 3: Downgraded our outlook for growth and indeed expecting inflation to 24 00:01:09,400 --> 00:01:12,720 Speaker 3: remain higher for longer and to come down more slowly. 25 00:01:12,760 --> 00:01:15,080 Speaker 3: I mean, it is clear that there is a high 26 00:01:15,160 --> 00:01:18,120 Speaker 3: level of uncertainty in the global economy, high level of 27 00:01:18,440 --> 00:01:23,160 Speaker 3: policy uncertainty, increasing cride restrictions, tightening financial conditions. All of 28 00:01:23,200 --> 00:01:26,480 Speaker 3: that is vying on a consumer and business confidence and 29 00:01:26,560 --> 00:01:30,840 Speaker 3: hence having a negative impact on the investment and growth outlook. 30 00:01:31,360 --> 00:01:33,520 Speaker 2: And also think about the sort of political dimension of 31 00:01:33,560 --> 00:01:35,480 Speaker 2: this and the sort of moving away from the United 32 00:01:35,520 --> 00:01:39,000 Speaker 2: States from the multilateral order. Is there a risk associated 33 00:01:39,000 --> 00:01:41,560 Speaker 2: do you think with basically this breaking out into kind 34 00:01:41,600 --> 00:01:44,680 Speaker 2: of a g sex world versus a kind of bricks world, 35 00:01:44,720 --> 00:01:46,720 Speaker 2: and then there's this sort of G twenty that sits 36 00:01:46,720 --> 00:01:48,360 Speaker 2: in the middle trying to bring these things together. 37 00:01:48,560 --> 00:01:50,240 Speaker 1: What's the risk of that sort of world? 38 00:01:50,560 --> 00:01:52,280 Speaker 3: Well, I mean, I've just gone out of a G 39 00:01:52,360 --> 00:01:54,920 Speaker 3: seven Finance minister's meeting, and I think the G seven 40 00:01:55,040 --> 00:01:58,360 Speaker 3: is working very constructively and very cooperatively. 41 00:01:58,440 --> 00:02:01,920 Speaker 1: I certainly don't see that risk. And next year the 42 00:02:02,000 --> 00:02:04,520 Speaker 1: United States will be sharing the. 43 00:02:04,240 --> 00:02:07,120 Speaker 3: G twenty, So I mean, I think the US will 44 00:02:07,160 --> 00:02:11,160 Speaker 3: continue to be a very important contributor to global conversations 45 00:02:11,160 --> 00:02:14,160 Speaker 3: on key policy issues. Now, I mean, right now, there's 46 00:02:14,200 --> 00:02:19,880 Speaker 3: clearly an area where there is a level of disagreement. 47 00:02:20,000 --> 00:02:21,760 Speaker 3: There's some issues to be resolved, and it comes to 48 00:02:21,760 --> 00:02:24,960 Speaker 3: global tride arrangements. I mean, there's no question that open 49 00:02:25,000 --> 00:02:27,480 Speaker 3: markets and rules by stride have been a key driver 50 00:02:27,600 --> 00:02:30,200 Speaker 3: of increased incomes and living standards around the world. But 51 00:02:30,280 --> 00:02:32,280 Speaker 3: it's also true that there are some issues to be 52 00:02:32,320 --> 00:02:35,000 Speaker 3: resolved when it comes to the rules by striding system. 53 00:02:35,000 --> 00:02:37,200 Speaker 3: I guess what we're saying from an OCD point of 54 00:02:37,280 --> 00:02:41,200 Speaker 3: view too countries around the world is work those issues 55 00:02:41,280 --> 00:02:45,200 Speaker 3: through on the basis of dialogue and corporation. Work those 56 00:02:45,200 --> 00:02:48,359 Speaker 3: issues through and find vise to make global triding arrangers 57 00:02:48,520 --> 00:02:51,120 Speaker 3: international trading around now it's fairer and work better in 58 00:02:51,160 --> 00:02:53,840 Speaker 3: the way that preserves the economic benefits of open markets 59 00:02:53,880 --> 00:02:54,880 Speaker 3: and rules by stride. 60 00:02:54,919 --> 00:02:56,280 Speaker 2: And if you just got off that car with the 61 00:02:56,320 --> 00:02:59,079 Speaker 2: G seventies, so presumably also with Scott Bessen on that car, 62 00:02:59,160 --> 00:03:01,040 Speaker 2: what was the message. What kind of insight can you 63 00:03:01,080 --> 00:03:02,919 Speaker 2: give into the Americans like inside is. 64 00:03:02,840 --> 00:03:06,000 Speaker 3: That G seven countries continue to think very carefully about 65 00:03:06,120 --> 00:03:08,720 Speaker 3: the challenges and opportunities in the global economy and work 66 00:03:08,760 --> 00:03:12,160 Speaker 3: together in a very cooperative and constructive way and trying to. 67 00:03:12,120 --> 00:03:14,160 Speaker 1: Deal with some of those issues like. 68 00:03:14,440 --> 00:03:19,280 Speaker 3: Supplies, shine, resilience related to challenges, economic security related challenges, 69 00:03:19,360 --> 00:03:22,640 Speaker 3: issues around unfair tried practices and how based to tackle them. 70 00:03:22,680 --> 00:03:25,160 Speaker 3: But I guess the key focus here is I mean, 71 00:03:25,160 --> 00:03:27,440 Speaker 3: it is important for the global economy and to boost 72 00:03:27,919 --> 00:03:33,239 Speaker 3: the global economic outlook to as quickly as possible, to 73 00:03:33,760 --> 00:03:36,720 Speaker 3: restore policy certainty, as well as dealing with some of 74 00:03:36,800 --> 00:03:38,320 Speaker 3: the structural challenges. 75 00:03:37,960 --> 00:03:38,560 Speaker 1: In front of us. 76 00:03:38,600 --> 00:03:40,880 Speaker 2: And you're not just an observer of the global economy, 77 00:03:40,880 --> 00:03:43,240 Speaker 2: you're also a participant in some of the initiatives, namely 78 00:03:43,280 --> 00:03:46,320 Speaker 2: the global minimum tax initiative that has been sort of 79 00:03:46,360 --> 00:03:48,520 Speaker 2: launched a few years ago, had a lot of momentum 80 00:03:48,560 --> 00:03:50,960 Speaker 2: under Biden, had lost some of that momentum under Trump, 81 00:03:50,960 --> 00:03:53,080 Speaker 2: with some carveouts for the United States. I'd like to 82 00:03:53,080 --> 00:03:54,680 Speaker 2: get an update from you on where we stand with 83 00:03:54,720 --> 00:03:55,120 Speaker 2: that today. 84 00:03:55,360 --> 00:03:58,120 Speaker 1: Well, I mean that's not quite right. Do why you 85 00:03:58,160 --> 00:03:58,480 Speaker 1: find that? 86 00:03:58,560 --> 00:04:00,920 Speaker 3: I mean, the United States aide of global tax implies 87 00:04:00,960 --> 00:04:03,720 Speaker 3: for some time. It was introduced under the first Trump 88 00:04:03,800 --> 00:04:08,360 Speaker 3: administration and the OICD Global room Tax, which is now 89 00:04:08,400 --> 00:04:11,040 Speaker 3: being legislated or is in the process of being legislated 90 00:04:11,280 --> 00:04:14,600 Speaker 3: by sixty seven countries around the world and more countries 91 00:04:14,640 --> 00:04:15,240 Speaker 3: coming on. 92 00:04:15,200 --> 00:04:17,120 Speaker 1: Board, is also a reality. 93 00:04:17,200 --> 00:04:19,719 Speaker 3: So what's been happening is that at the G seven again, 94 00:04:19,760 --> 00:04:22,679 Speaker 3: I mean, there have been a lot of conversations about 95 00:04:22,680 --> 00:04:26,280 Speaker 3: how to manage in the most appropriate way side by 96 00:04:26,320 --> 00:04:29,800 Speaker 3: side arrangement between the US version of the Global minimum 97 00:04:29,800 --> 00:04:34,480 Speaker 3: Tax and the global attax which was negotiated through the 98 00:04:34,520 --> 00:04:38,200 Speaker 3: ODG twenty Inclusive framework, and I when the United States 99 00:04:38,240 --> 00:04:42,159 Speaker 3: continues to be a subject to key aspects of the 100 00:04:42,279 --> 00:04:44,880 Speaker 3: OSDG twenty version of the Global Minroom Tax, but there 101 00:04:44,920 --> 00:04:49,360 Speaker 3: are also some pragmatic approaches to ensure that there is 102 00:04:49,400 --> 00:04:52,120 Speaker 3: not an unnecessary level of double up when it comes 103 00:04:52,600 --> 00:04:54,640 Speaker 3: to the imposition of global rom attax arranging. 104 00:04:54,760 --> 00:04:56,640 Speaker 2: So I guess there was a concern after this G 105 00:04:56,720 --> 00:04:58,120 Speaker 2: seven meeting, and there was a bit of a car 106 00:04:58,120 --> 00:04:59,720 Speaker 2: out that there was a two tiered system where the 107 00:04:59,800 --> 00:05:01,920 Speaker 2: UNI it says we'll play by slightly different rules. So 108 00:05:01,920 --> 00:05:04,120 Speaker 2: are you saying that has basically not altered in any 109 00:05:04,160 --> 00:05:07,159 Speaker 2: way the participation of other countries. We heard from Frederick 110 00:05:07,600 --> 00:05:11,720 Speaker 2: Mounts yesterday saying that the system was no longer appropriate, 111 00:05:11,839 --> 00:05:12,440 Speaker 2: that they had. 112 00:05:12,320 --> 00:05:13,000 Speaker 1: To be revisited. 113 00:05:13,040 --> 00:05:14,839 Speaker 2: We had that walk back a bit by the Finance 114 00:05:14,880 --> 00:05:17,800 Speaker 2: Minister no As fa As And again I mean. 115 00:05:17,680 --> 00:05:21,000 Speaker 3: I've come out of a G seven meeting now, and 116 00:05:21,040 --> 00:05:23,720 Speaker 3: I mean Germany is a strong supporter of the global 117 00:05:23,720 --> 00:05:27,320 Speaker 3: women tax arrangements as they've been negotiated through the always 118 00:05:27,320 --> 00:05:31,920 Speaker 3: ce G twenty inclusive framework, and of course European countries 119 00:05:32,200 --> 00:05:35,360 Speaker 3: who were among the first to implement the Global women tax, 120 00:05:35,360 --> 00:05:38,960 Speaker 3: oridents who were through a relevant EU level directive, and 121 00:05:39,000 --> 00:05:42,200 Speaker 3: I'm very confident that Germany and other countries across Europe 122 00:05:42,360 --> 00:05:45,200 Speaker 3: that will continue to attack this very important reform forward. 123 00:05:45,320 --> 00:05:47,200 Speaker 2: So at this point, no other country is seeking a 124 00:05:47,279 --> 00:05:49,880 Speaker 2: similar situation to what the UNITS has negotiated. 125 00:05:50,320 --> 00:05:52,719 Speaker 3: The US was the first country in the world to 126 00:05:53,440 --> 00:05:56,880 Speaker 3: essentially impose a global women at tax on its internationally 127 00:05:56,960 --> 00:06:02,279 Speaker 3: operating businesses US headquartered international pride businesses, and so what 128 00:06:02,520 --> 00:06:04,480 Speaker 3: is yet to be finalized. I mean what the G 129 00:06:04,600 --> 00:06:08,320 Speaker 3: seven has assessed and reflected in a statement, which is 130 00:06:08,320 --> 00:06:11,960 Speaker 3: an important statement, is the opportunity for side by side 131 00:06:12,080 --> 00:06:14,560 Speaker 3: arrangement with a clear focus on making sure that this 132 00:06:14,960 --> 00:06:18,359 Speaker 3: doesn't create new risks of bias, eerosion, profit shifting that 133 00:06:18,400 --> 00:06:21,560 Speaker 3: it does reserve a level applying field, and the US 134 00:06:21,600 --> 00:06:25,560 Speaker 3: continues to be engaged through the OCD processes, but to 135 00:06:25,640 --> 00:06:28,159 Speaker 3: come up with a pragmatic side by side arrangement that 136 00:06:28,279 --> 00:06:31,240 Speaker 3: helps to preserve the policy objectives, which is to make 137 00:06:31,279 --> 00:06:34,520 Speaker 3: the international tax arrangements fair and work better, to preserve 138 00:06:34,839 --> 00:06:37,640 Speaker 3: the tax basis for governments, but to also provide certainty 139 00:06:37,640 --> 00:06:40,680 Speaker 3: for business in terms of the international tax arrangements operate. 140 00:06:40,760 --> 00:06:43,560 Speaker 3: So we're preserving the policy objectives, would be coming up 141 00:06:43,600 --> 00:06:46,159 Speaker 3: with a pragmatic way, and that is the discussion now 142 00:06:46,360 --> 00:06:49,080 Speaker 3: that will happen in the broader inclusive rymework on how 143 00:06:49,200 --> 00:06:52,120 Speaker 3: the US system and the OCD G twenty system can 144 00:06:52,160 --> 00:06:55,920 Speaker 3: operate in a complementary why the most appropriate white possible. 145 00:06:55,560 --> 00:06:57,320 Speaker 2: And the OECD itself is also one of the great 146 00:06:57,360 --> 00:07:00,520 Speaker 2: pillars of these multilateral organizations trying to bring tries together 147 00:07:00,560 --> 00:07:03,240 Speaker 2: to cooperate economically. Of course, the United States is also 148 00:07:03,279 --> 00:07:05,400 Speaker 2: one of the the largest funder of that, and there's 149 00:07:05,400 --> 00:07:07,800 Speaker 2: been some doubt about the US's commitment to these sort 150 00:07:07,839 --> 00:07:09,920 Speaker 2: of initiatives, but you can't think the United States will 151 00:07:09,960 --> 00:07:12,040 Speaker 2: remain a support of the OECD and that funding work 152 00:07:12,080 --> 00:07:12,520 Speaker 2: keep flowing. 153 00:07:12,560 --> 00:07:14,840 Speaker 3: Look, I mean, I can't speak for the United States, 154 00:07:14,880 --> 00:07:16,520 Speaker 3: but you're right. I mean, the United States is an 155 00:07:16,520 --> 00:07:20,560 Speaker 3: incredibly important founding member of the OCD. In fact, you know, 156 00:07:20,600 --> 00:07:25,200 Speaker 3: we started our life as the Marshall Plan Secretary, that's 157 00:07:25,280 --> 00:07:29,240 Speaker 3: the Organization for European Economy Cooperation. The OCD is very 158 00:07:29,320 --> 00:07:34,160 Speaker 3: much a US diplomatic foreign policy success story, and all 159 00:07:34,200 --> 00:07:38,360 Speaker 3: of my interactions with the US government, with US business, 160 00:07:38,360 --> 00:07:40,400 Speaker 3: and with stakeholders in the United States is that there 161 00:07:40,480 --> 00:07:42,600 Speaker 3: is very strong support for the work we do. 162 00:07:43,080 --> 00:07:45,760 Speaker 1: Are bringing together like minded market place. 163 00:07:45,640 --> 00:07:49,080 Speaker 3: Democracies from around the world, focusing on your policy based 164 00:07:49,160 --> 00:07:52,840 Speaker 3: practice and the development of the best practice standards. But 165 00:07:53,000 --> 00:07:54,680 Speaker 3: you know, in the end of it, of course, coman 166 00:07:54,720 --> 00:07:58,000 Speaker 3: days are matters for the United States to consider through 167 00:07:58,040 --> 00:07:59,960 Speaker 3: its internal processes as APPROBA. 168 00:08:00,520 --> 00:08:02,080 Speaker 2: Let's see Escorman, thank you so much for your time 169 00:08:02,080 --> 00:08:03,960 Speaker 2: here on the sidelines of the Jeekes twenty meeting. 170 00:08:04,440 --> 00:08:06,160 Speaker 1: Outside of Durban. 171 00:08:05,880 --> 00:08:08,640 Speaker 2: South Africa. There sort of a sort of continued support 172 00:08:08,680 --> 00:08:10,640 Speaker 2: for that INITIAT for the Global Minimum Tax that came 173 00:08:10,680 --> 00:08:12,720 Speaker 2: into a little bit of doubt after the United States 174 00:08:12,800 --> 00:08:15,400 Speaker 2: wanted some amendments to its seemingly moving forward with the 175 00:08:15,400 --> 00:08:17,400 Speaker 2: support seemingly also of the Germans, where there was a 176 00:08:17,400 --> 00:08:18,520 Speaker 2: little bit of doubt as well